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Concentration and self-censorship in commercial media

Within a simple model of non-localized, Hotelling-type competition among arbitrary numbers of media outlets we characterize quality and content of media under different ownership structures. Assuming advertising-sponsored, profit-maximizing outlets, we show that (i) topics sensitive to advertisers can be underreported (self-censored) by all outlets in the market, (ii) self-censorship increases with the concentration of ownership, (iii) adding outlets, while keeping the number of owners fixed, may even increase self-censorship; the latter result relies on consumers' most preferred outlets being potentially owned by the same media companies. We argue that externalities resulting from self-censorship could be empirically large.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1256.

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Date of creation: Dec 2010
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Handle: RePEc:upf:upfgen:1256
Contact details of provider: Web page: http://www.econ.upf.edu/

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